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By: Zeeshan Ahmed Bhatti. Strategic business objectives of information systems. Strategic Business Objectives of IS. Entire sectors of economy are nearly inconceivable w/out substantial investment in IT E.g., Google, Ebay etc.

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By zeeshan ahmed bhatti

By: Zeeshan Ahmed Bhatti

Strategic business objectives of information systems

Strategic business objectives of is
Strategic Business Objectives of IS

  • Entire sectors of economy are nearly inconceivable w/out substantial investment in IT

    • E.g., Google, Ebayetc.

  • Today no industry can exist without the use of Information Technology

    • Finance, Insurance, Real Estate, Aviation etc.

  • IT has now become the core competence of a firm

    • E.g., HR, Finance etc.

Strategic business objectives of is1
Strategic Business Objectives of IS

  • There is an interdependence b/w a firm’s ability to use IT and its ability to implement corporate strategies and goals

    • Depends on what technology it uses?

    • What is that technology capable of doing?

      • E.g., Is that technology capable of achieving what the firms wants to achieve in next 5 or 10 years?

  • Specifically, Businesses invest heavily in IS to achieve 6 strategic business objectives:

    • Operational excellence, new products, services, Customer and supplier intimacy, decision making and competitive advantage

1 operational excellence
1) Operational Excellence

  • Businesses continuously seek to improve efficiency of their operations

    • IS helps managers to achieve that

      • E.g., Wal-Mart (Rev. $447 Billion) has a RetailLink system – As soon as a customer purchases an item, the supplier monitoring the item knows to ship a replacement

2 new products services and business models
2) New Products, Services, and Business Models

  • IS – a major tool for firms to create new products & services

    • Apple Inc. transformed an old business model of music distribution based on vinyl records, tapes, and CDs into an online, legal distribution model based on its own iPod technology platform.

    • Blockbuster and Netflix !!

3 customer supplier intimacy
3) Customer & Supplier Intimacy

  • Business wants Customer Loyalty – Repurchase behavior

    • Ex. Mandarin Oriental Hotels use IS to keep track of their guest preferences – Room temp., Lights; frequently dialed nos. etc

  • Similarly, Business needs to be engaged with suppliers – more engagement : less costs

    • JC Penney stores in US sales’ record appear in Hong Kong (Supplier). They know what sizes, colors and styles are needed.

  • 4 improved decision making
    4) Improved Decision Making

    • Many business mgrs operate on an information fog bank

      • Never having right info at the right time to make the right decision

        • E.g., Consider the outage of your Broadband or Cellular Connection

      • Result: Over or Under-production of goods & services, misallocation of resources, and poor response times

      • IS makes it possible to use real-time data

      • E.g., Verizon’s Web-based digital dashboard for customer complaints, network performance, line outages etc.

    5 competitive advantage
    5) Competitive Advantage

    • Doing things better than your customers

      • E.g., Toyota’s TPS (Toyota Production System) focuses on organizing work to eliminate wastes

      • IS help Toyota implement the TPS and produce vehicles (customized) based on what the customers have actually ordered

    6 survival
    6) Survival

    • Necessity of doing business

    • Necessities are driven by industry-level changes

      • E.g., Citi Bank’s ATM initiative in NYC in 1977 urged other banks to do so as well

      • Similarly, some govt. regulations make it necessary e.g., in Pakistan PTA’s initiative about customer SIM cards information

    So what is an is
    So……What is an IS?

    • Information technology (IT) consists of all the hardware and software that a firm needs to use in order to achieve its business objectives

    • An Information system can be defined technically as a set of interrelated components that collect (or retrieve), process, store, and distribute information to support decision making and control in an organization

    Information vs data
    Information Vs Data

    • Data: Streams of raw facts

    • Information: interpretation of data

    Functions of an is
    Functions of an IS

    • Input: Collects raw data from within the organization or from external environment

    • Processing: coverts raw data into meaningful form

    • Output: transfers processed info to its users

    • Feedback: by the members to evaluate or correct the input stage

      • E.g., London2012 Website about number of medals; Inputs? Processing? Outputs? W.r.t. Countries, Players etc.

    • Organization / Management

      • First Line, Middle Mgrs, Top Executives, Knowledge workers

    • Technology:

      • Hardware: Physical equipment for input, processing, and output activities in an IS

      • Software: pre-programmed instructions that control and coordinate the computer H/W

      • Networking & Telecommunication Tech: links various pieces of H/W and transfers data

      • Internet: Network of networks

      • Intranet: internal corporate networks

      • Extranet: private intranet networks extended outside the firm